| | | - Massive market changes as savings bank accounts slashed
- Halifax Reward, Club Lloyds, Santander 123, TSB Classic Plus all wield the axe
- Yet we show how to earn 5% or get £150 to switch
The last bastions of decent interest rates - high interest accounts - are disappearing fast. Lloyds, First Direct, HSBC, M&S and TSB have all followed Santander's lead and decided to cut their rates, either immediately or in the next few months. Plus Halifax has also slashed its monthly reward.  "So where can I get decent rates?" we hear you cry. There's no great solution, so we've crunched the numbers to tell you exactly what you should do. But before you start, if you have debts you're paying interest on, it's usually better to repay debts before saving.
| • | Is your bank slashing interest? Here are the key changes so far:
- Club Lloyds - 4% to 2% on up to £5,000. From 8 Jan
- First Direct regular saver - 6% to 5%. Already happened
- Halifax Reward - £5/mth to £3/mth. From 1 Feb
- HSBC regular saver - 6% to 5%. Already happened
- M&S Bank regular saver - 6% to 5%. Already happened
- Santander 123 - 3% to 1.5% on up to £20k. From 1 Nov
- TSB Classic Plus - 5% on max £2k to 3% on max £1,500. From 4 Jan | | | | • | The ones that haven't changed. Bank of Scotland Vantage, which pays 3% on up to £5,000; Tesco which pays 3% on up to £3,000; and Nationwide's FlexDirect, which pays 5% fixed for a year on up to £2,500, all tell us they have no plans to cut their rates at the moment.
These are the headlines - for full details see bank-by-bank changes. But Martin's view is: "Saying 'no current plans to cut rates' doesn't mean it won't happen. Nationwide is most likely not to cut rates, as its high interest rate only lasts a year - so the cost to it is capped. Yet with all three I think there's still a plausible chance they'll follow the trend within the next few months." | | | | • | Hit by the recent cuts? Don't automatically close your account in anger. Although you may be furious at your bank, and want to ditch the account to punish it, try to be logical. As long as the account is right for you now, and you chose it for the right reasons, it'll still be the right one until the rates change. So our message is...
Don't make a decision until your bank rate actually changes. |
After all the cuts, which account should you get? We've worked out the best accounts for everyone AFTER the rate changes take effect. And of course we'll reassess these accounts again later, because others may also change. All these current accounts credit-check you when you apply, and all have £75,000 UK savings protection. | | | | 1. | Santander 123 wins for those with savings above £10,000 unless you want to repeatedly switch. From Tue 1 Nov the Santander 123* rate drops from 3% to 1.5% AER variable on up to £20k. There's a £5/mth fee, but we'll assume this is covered by the up-to-3% cashback on bills (£500/mth min pay-in), as our polls suggest it is for most people, and more.
It still wins for people with savings above about £10,000 who don't want to switch every year, and even if you're prepared to move, it still beats anything for savers with more than about £15,000.
In a couple? You can earn 1.5% on a huge £60k by opening 3 accounts. | | | | 2. | M&S Bank and Co-op Bank are winners for most savers willing to switch again in a year. These current accounts don't pay savings interest, yet the switch bonus is such that they'll beat anything for savers with less than £15,000 over the course of the first year. To really max your savings, drip-feed from them into their linked regular savers. - Switch to M&S Bank* for a free £100 M&S gift card + additional £10/mth added whenever you pay in £1,000/mth for the first year. There's also a 5% fixed linked regular saver on up to £250/mth and £100 0% overdraft. Who can get it? You must switch 2 direct debits.
- Co-op Bank* pays switchers £150 + up to £5.50/mth. You need to switch 4+ active direct debits, plus sign up to its Everyday Rewards scheme and jump through a few hoops to get the monthly extras. No min pay-in for the £150 but it's £800/mth (equiv £9,850 salary) for the extras. Note, rewards can change with 30 days' notice.
- Ends soon. Free £200 (£150 upfront, £50 if you stay). Switchers to HSBC's Advance* account who apply by Sun 30 Oct and switch a min two direct debits or standing orders get £150. Register for online/mobile banking and if you're with it after a year and have paid in a min £1,750/mth (equiv £26,300 salary) for at least 9mths, you get another £50. You can save up to £250/mth in its linked 5% fixed regular saver, plus it has a 6mth 0% overdraft.
- £100 + no.1 service bank account. First Direct* might not offer the biggest switch bonus but it's won every customer service poll we've done, with 91% rating it 'great'. Also it has a £250 0% overdraft and you can open a linked 5% fixed regular savings account where you can save up to £300/mth. Just ensure you pay in £1,000/mth to avoid the £10/mth fee.
| | 3. | Bank of Scotland is a winner if you've up to £10,000 and don't want to switch (unless it cuts its rates). Open a Classic Account with Bank of Scotland and you get 3% AER variable on up to £5,000 as long as you have at least £3,000 in it (max £148/yr). Put anything between £5k-£10k in a top savings account, see points 7 & 8. | | | | 4. | Disappointed Halifax Reward customer, but want ongoing rewards? When Halifax cuts its rewards from £5-£3/mth in Feb, consider the Co-op Current Account mentioned above, which pays up to £5.50/mth rewards, and as a one-off bonus gives you £150 to switch.
If you've bills that you pay by direct debit though, it's possible to get higher ongoing monthly rewards with the NatWest Reward* account. It has a £3/mth fee, but pays 3% cashback on qualifying bills. Or there's the Santander 123 Lite account, which costs less at £1/mth but only pays up to 3% on qualifying bills, and has a £500/mth min pay-in.
As a rule of thumb both will beat Co-op and Halifax's monthly rewards if you spend more than £350/mth on qualifying bills, and unless you have a Santander mortgage, the higher cashback on the NatWest account will mean it wins overall. | | | | 5. | First Direct or Nationwide win if you're often overdrawn. An overdraft's a debt like any other, so if you often go into the red, cutting its cost makes it easier to clear. And if you ever bust your limit it'll wipe out any gains made from savings, so always look for the largest overdraft available. Full info & more ways to save in Cut Overdraft Costs, but in brief...
- Under £350 overdraft? Switch to 0%: First Direct* has a £250 0% overdraft, but also currently gives £100 to switchers, so that'd instantly clear some. Providing you can meet its min £1,000/mth pay-in (equivalent to £13,100 salary), nothing beats it.
- Larger limit possible but not certain: Nationwide's FlexDirect* may give a bigger 0% overdraft, but only for a year (50p/day after, so aim to clear before). The overdraft limit you get depends on your credit score. As Bigbossblues told us: "I received a £2,100 limit, saving me £36 a month on my Lloyds overdraft for 12 months". | | | | 6. | Save every month and you can get 5%. As mentioned in point 2, several current accounts come with linked high-interest regular savings accounts, allowing you to save up to £500 each month. The top picks are First Direct, HSBC and M&S Bank, all paying 5% AER fixed for a year, and Nationwide, paying 5% AER variable. For more, see Regular Savings. | | | | 7. | Open more accounts and get high interest on them all. Don't feel you need to close your existing account to get some of the ones above. Simply split your cash between the best, and that way you can save even more money at these high rates. Here's how to do it:
- Open a new account. But, crucially, don't use the switching service. This is because if you do it'll automatically close your old account.
- Make sure you can meet the number of standing orders or direct debits that the new account needs. If you need to transfer these across from your existing account, do it manually.
- Arrange to meet any pay-in or other criteria the new bank has. Most will require a minimum pay-in per month. Some will also need you to jump through other hoops, like registering for internet banking, paperless statements or staying in credit.
Once open, just pay the spare cash you need to save into the new account, meet its criteria, and you'll start earning interest.
Become a bank savings tart and save £37,000 at over 2%
Some people have six or seven accounts and siphon money between them using standing orders to meet all the minimum pay-ins. We've worked out that if you max out these accounts on savings, you could save £37,000 at an average 2.16%:
- Santander: 1.5% on £20k = £298 (if cashback covers £5/mth fee)
- Bank of Scotland: 3% on £5,000 = £148
- Nationwide: 5% on £2,500 = £122.25
- Club Lloyds: 2% on £5,000 = £99
- Tesco Bank: 3% on £3,000 = £88.80
- TSB: 3% on £1,500 = £44.40
Are you a bank savings tart? Let us know how you do it. | | | | 8. | Get up to 1.95% fixed or 1.1% easy access in a normal savings account. There are still options, though rates are spitworthily low. - If you're a first-time buyer, the Help to Buy ISA is a no-brainer, as you can save for a mortgage deposit with the incentive of the state adding 25% on top of what you save (max £3,000).
- The best easy-access rates are currently with cash ISAs where you can get 1.1% AER.
- If you've used your ISA allowance then top easy-access savings pay 1%, or you can boost these rates by locking your money away in fixed savings - the top one-year fix pays 1.4%, and you can increase this to 1.6% if you fix for three years, or 1.95% for five years.
- Or you could try premium bonds which have a 1.25% 'interest rate', though most won't win anything like that much.
| | | | | | | | | | | | | | | | | | | | Hot short-lived promo from Britain's biggest broadband provider
Faster fibre broadband is good for gamers, video streamers or multiple users on one connection. You usually pay more for the privilege but this is cheaper than most standard-speed broadband deals and smashes typical fibre rates of £400-£550+ a year. Here are the need-to-knows... -
 New. Hot BT fibre broadband & line rent. Avail from 9am Wed till 11.59pm on Thu 27 Oct. BT broadband newbies (anyone who doesn't have it now) can get a 1yr contract for line rent & up to 52Mb speed unlimited broadband (up to 3x faster than standard) via comparison site Cable.co.uk using this BT deal link*. It's discounted to £394 for a year, and you can claim a further £175 back. 83% of the UK can get it - you're told when applying. Here's what to do:
1. Pay line rent upfront. If you can afford to, during the application opt to pay £205.08 for the year (equiv £17.09/mth). Or it's £18.99/mth.
2. The broadband's discounted to £10.99/mth for a year. It's usually £26/mth & will go to this after.
3. You pay a one-off £49 activation fee. Installation's free but you must pay £7.95 p&p for the 'free' router.
4. To get the £175 you need to claim AFTER installation. The key to the deal is you get a £125 prepaid Mastercard (which you can spend anywhere that takes Mastercard) and a £50 cheque. BT won't remind you so diarise to use this prepaid Mastercard claim form and cheque claim form. They can take up to 45 days to arrive from claiming.
- What about calls? Weekend calls to UK landlines are included. See other BT costs.
- What if BT hikes prices? Discounted broadband is fixed for a year. Standard line rent could rise, but you're protected if you pay upfront.
- Anything else? You get 100GB free online storage & you can opt in to free BT Sport for 3mths (then it's from £5/mth - cancel if you don't want it).
- Can I get more cashback? Regular cashback site users may see bigger cashback, but often on more expensive deals. They can change daily, so check.
Analysis - how good is this? It's a cracker - far cheaper than BT's standard line rent + fibre £540/yr cost. Provided you claim the £175, the net cost is £218.91 for the year before calls, equivalent to £18.24/mth. If you pay line rent monthly it's £241.71 before calls, equivalent to £20.14/mth. -
Don't need fibre, or already with BT? If you don't need fast fibre, the market's cheapest standard broadband is Plusnet at £186 for a year - for fibre the next cheapest is SSE at £21/mth. Full options in Cheap Broadband. | | | | | | | | | | | | | | | The longest deals have got even longer. Save £100s or even £1,000s in credit card interest
A balance transfer means you get a new card that pays off your existing credit & store cards, so you owe it instead, but at 0%. Your repayments clear the debt rather than just interest, so you're debt-free quicker. If accepted, the new table-topper gives you a whopping 42mths to repay. But its fee is at least half a percentage point more than other best buys, so a slightly shorter, yet lower fee, card might be better.
So will you be accepted? One way to find out your chances is to use our Balance Transfer Quick Eligibility Calc (or our FULL Credit Club Balance Transfer Eligibility Calc, where you also get a free Credit & Affordability Score). The better the odds, the more likely you are to get it. Plus for some cards the calc shows if you're 'pre-approved', meaning you've a 100% chance of getting the headline rate (subject to an ID and fraud check).
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Tip 1: Go for the lowest fee in the time you're sure you can repay. Most 0% cards charge a fee to transfer your balance, eg, 4% is £40 per £1,000 shifted. So calculate how long you'll take to clear the debt, add a bit for safety, then pick the lowest fee within that time. Unsure? Play safe and go long, even with a bigger fee. -
Tip 2: Some are 'up to' 0%, so you may get a shorter deal. That's why we include the best non 'up-to' options in the table - with them, you know for sure what you get if accepted (& our eligibility calc will say if you've good odds). -
Balance Transfer Golden Rules. Full help, get cashback & ALL best buys: Balance Transfers (APR Examples).
a) Never miss the min monthly repayment, or you could lose the 0% deal and it'll cost far more.
b) Clear the card or balance-transfer again before the 0% ends, or the rate rockets to the higher APR.
c) Don't spend/withdraw cash on these. It usually isn't at the cheap rate and cash withdrawals hit your credit file.
d) You must usually do the balance transfer within 60/90 days to get the 0% & any cashback/gift cards. | | | | | | | | | They can get this email free every week | | | | | | | | | The weak pound is the key reason but finding cheaper fuel and driving less like Lewis Hamilton can save you big
Pump prices have been steadily rising since August, from an avg 109p per litre on petrol to 114p now. And last week the Petrol Retailers' Association predicted they'd jump by another 5p by the month end. It's primarily because the weak pound makes buying in dollars pricier, which is how firms purchase fuel. So use our Cheap Petrol guide to put the brakes on spiralling costs - here are speedy tips for starters... -
 Find YOUR cheapest forecourt in seconds - pay up to 26% less. The differences can be huge, eg, in central London the petrol range is 110.9p a litre to a whopping 149.9p. In Manchester (M1 postcode area) it's 109.7p to 127.9p. Use a petrol price comparison to find the cheapest fuel near you.
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Drive smoother and more efficiently to cut use by 30%. Incl gentle acceleration, better positioning and more. See 7 ways to drive efficiently. -
It's not just fuel - save £100s on other car costs. Many spend £3k+/yr running a car, so here's our souped-up set of tips: - Beat car insurance hikes: Prices are up 17% over the past year and are predicted to keep rising, so slam the brakes on them with our Cheap Car Insurance guide, even if you're not at renewal.
- Free £15 Halfords winter car check: Get your battery, wipers, oil & bulbs checked. Free car check-up
- Find hidden 'fewer fails' MOT centres: They don't do repairs, so no vested interest to fail you. Cheap MOTs
- Check your photo licence or risk a £1,000 fine: 2m+ have expired. See what to check & what to do if it's invalid.
- £23 RAC cover: Never auto-renew at sky-high rates, breakdown firms are among the easiest to haggle with. Cheap Breakdown | | | | | 'Time for an unpleasant chat.' Martin's message on how to protect yourself and loved ones against the impact of death, divorce & dementia. Free wills & more
SUCCESS OF THE WEEK: (Send us yours on this or any topic)
"Energy payments were just under £300/mth. Switched energy to GnERGY and they're down to £100/mth - saving £2,400/yr. Also saved £200 on home insurance and £200 on car insurance. Love your emails."
FREE £5ish Old Mout Cider at 200+ pubs, incl Slug & Lettuce. Via mobile voucher. Excl Scot & NI. Free cider. Pls be Drinkaware. | | | | | | How do you rate your home phone and broadband provider? We can tell you which the cheapest providers are, but to find out if their service is any good, we need your help. So twice a year we ask you to tell us about your customer service experiences. You'd rather live in an old brothel than go without fast broadband... In last week's poll we asked what you would never tolerate when buying a home – even if it was at a big discount. Fewer were put off by the property being an ex-brothel (27%), a former drugs den (37%), allegedly haunted (27%) or somewhere a murder had been committed (39%) than it having no access to high-speed broadband (40%). See the full home discount poll results. | | | | | | | | | | | | | | | | | | | | | | | | | | | Thu 20 Oct - Good Morning Britain, ITV, Deals of the Week, 7.40am. View previous
Fri 21 Oct - This Morning, ITV, Martin's Quick Deals, from 10.30am. View previous
Mon 24 Oct - This Morning, ITV, from 10.30am
Mon 24 Oct - BBC Radio 5 Live, Lunch Money Martin, noon. Subscribe to podcast | | | | Wed 19 Oct - Share Radio, 11.20am
Thu 20 Oct - BBC Radio Manchester, 4.50pm
Tue 25 Oct - BBC Radio Cambridgeshire, 2.20pm | | | | | | | Q: You always say credit cards such as Halifax Clarity are one of the cheapest ways to spend abroad but to ONLY use them abroad. If you repay each statement in full surely there's no penalty for occasionally using them in the UK? Steven, by email. MSE Sally's A: You're right that there's no penalty - but if you always repay in full, you're better off getting a card to use in the UK that gives you something back. Options include cashback, reward or airline cards. All reward you for spending on them, by paying up to 5% cashback or through reward scheme loyalty points for airlines such as British Airways or shops such as Marks & Spencer. Remeber though - with these cards, if you don't ALWAYS repay in full, any gains will be lost through the interest charged. Please suggest a question of the week (we can't reply to individual emails). | | | | | | | That's it for this week, but before we go, check out this thread from the forum: Living with a famous name. Our forumites have been reminiscing about people they've met who share their names with famous celebs, including a James Bond, William Shakespeare and Harry Potter. Share your best 'doppelnamers' here. We hope you save some money,
The MSE team | | | | | | |
